Telecoms bids for 2014 in Mexico

Mexico is gearing up to auction off its broadcasting and satellite concessions this year.

Mexico is preparing to auction its broadcasting and satellite concessions BPlanet

At the end of 2013, the Federal Institute of Telecommunications (IFETEL) published two programmes for the auction of broadcasting and satellite concessions during the year of 2014.

Bids for Broadcast television

On December 20, 2013, IFETEL published in the Federal Official Gazette (FOG) the programme to bid for frequencies for broadcasting digital television (the TV Programme), which replaced the previous programme published during the past administration.The TV Programme is a consequence of the recent telecommunications constitutional reform published in June 2013. Such reform instructed the IFETEL to publish the call and bidding rules on or before March 9, 2014 for the tender of new concessions of frequencies of broadcast television, which should be gathered in order to form at least two new television channels with national coverage.

In this sense, the TV Programme provides 246 channels of digital broadcast television in 123 points of transmission, grouped in two television channels with national coverage.The commercial broadcasting television market in Mexico is currently highly concentrated as Televisa and TV Azteca, directly or indirectly, control 95 per cent of the concessions, 96 per cent of the audience, and 99 per cent of the advertising revenue. Therefore, both groups will not participate in the bidding process.

The TV Programme represents an opportunity to improve the sector by introducing more competition and expanding the access to new advertising and content options. However, foreign investment is limited up to 49 per cent, subject to reciprocity of the country of the ultimate investor.

Satellite bids

Prior the fulfillment of the procedures set out in the Radio Regulations of the International Telecommunication Union (ITU), on December 30, 2013, IFETEL published in the FOG the programme to bid two geostationary orbital slots for commercial use (the Satellite Programme). The main characteristics of the slots are the following: 113.0° West and 116.8° West and its associated Extended C and Extended Ku bands, with coverage within the territory of Mexico only, for the provision of fixed satellite services, subject to the ITU Radio Regulations and the international treaties executed by Mexico.

The Satellite Programme also intends to promote greater competition in the market and thus generate better quality and prices for the benefit of final users. The recent constitutional reform eliminated the restriction of 49 per cent foreign investment in satellite concessions. As a result of the foregoing, Satmex was recently acquired by Eutelsat Communications.

Conclusion

It is expected that within the first quarter of 2014 IFETEL will publish the call and bidding rules for both the TV Programme and the Satellite Programme. However, there is a questionmark over whether such a deadline can be met since the secondary legislation is still pending and the IFETEL must comply with other equally important regulatory activities within the same time frame.

IFETEL must prove to the sector that it will indeed carry out the mentioned bidding process in this year in order to comply with the purposes of the reform and to eventually improve the broadcasting and telecommunications services in Mexico.